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Federal Reserve Bank of Cleveland
Economic Commentary
Credit default swaps and their market function
Kent Cherny
Ben R. Craig

Credit derivative instruments allow default risk to be segregated from debt of all kinds. They have granted investors the ability to hedge their portfolios and provided numerous institutions with a new source of income. However, the market for credit default swaps is neither transparent nor regulated, perhaps undermining the stability of the financial system it has helped innovate.

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Kent Cherny & Ben R. Craig, "Credit default swaps and their market function" , Federal Reserve Bank of Cleveland, Economic Commentary, issue Jul, 2009.
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Keywords: Credit derivatives ; Swaps (Finance)
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